Bullion Whiplash: Gold Retreats from Historic Highs—Is a Deeper Correction Looming?

Indian gold prices retreated sharply on April 23 after spiking to record levels, reflecting a global correction following the relief in geopolitical concerns and profit-taking. On the Multi Commodity Exchange (MCX), gold June futures opened with a deep fall of ₹1,883, or 1.45%, at ₹95,457 per 10 grams after breaking the ₹1 lakh barrier for the first time just a day ago. By mid-morning, the prices traded around ₹95,998, down more than 1.3% from the last close.

 

Silver futures also trended in a similar pattern, opening at ₹95,451 per kg, or ₹450 less than the last session, and trading at ₹95,711, a fall of 0.18%. Both metals had risen earlier this week following global uncertainty, US President Donald Trump's remarks on the Fed, and expectation of robust Akshaya Tritiya demand.

 

The tide turned after President Trump dialled back his hard line on the Federal Reserve and indicated movement on China trade negotiations, which helped to enhance risk appetite, to firm the dollar, and to trigger profit-taking in bullion markets. Globally, spot gold fell 0.7% to $3,357 an ounce, and US futures declined 1.5%.

 

Analysts are expecting gold to remain range-bound in the short term with support at ₹95,850 and resistance at ₹98,650 on MCX. Support for Silver can be expected at ₹94,500 while resistance at ₹97,400. In spite of the correction, long-term gold fundamentals continue to be strong in the face of continuing global uncertainties.

 

Source: India TV News, Economic Times, Goodreturns, CNBC-TV18, Bajaj Broking